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ChatWork – office communications platform

Can this Japanese startup give Slack a run for its money, targetting new markets in Asia?

Vietnam’s up and coming tech scene is starting to grab some significant notice. With an estimated 50 million people using the internet, companies are looking to appeal to this market and take advantage to gain a foothold.

One such service is ChatWork, an internal communications product that was came together in 2012. CEO Toshi Yamamoto had previously opened his company EC Studios to work in web marketing in 2000, but recognised a space for growth in chat, and made the pivot.

Having received their Series A of US$2.5 million from GMO VenturePartners in April 2015, and then pulled another US$12.5 million for their Series B in January from JAFCO Japan and other investors, ChatWork is headquartered in Tokyo and Sunnyvale.

ChatWork was built with the intention of replacing those long threaded internal emails, simplifying communications within the team with features such as text, voice and video chat, task management, file sharing, etcetera.

Unlike Slack with their wealth of integrations such as Trello, Wunderlist, GitHub, etcetera, ChatWork gives users a straightforward messaging app that they believe has a wider appeal to users in workplaces that fall outside of the startup niche where those integrations are more commonly utilised.

ChatWork has also made efforts to secure communications, telling Geektime that they are, “focussed on the protection of Personally Identifiable Information (PII) on the Cloud, and ChatWork is the only messaging platform to provide this layer of security for its customers – which is particularly important for businesses.” They are ISO27001 certified, which counts for something in the wild west that is data storage of your communications.

This model seems to have an appeal to a wide audience, with the company telling Geektime that they work with over 100,000 companies. They cite a strong base of users in the Asian Pacific area – supporting Japanese, Vietnamese, as well as traditional and simplified Chinese – and a growing presence in English speaking countries such as the US. Backing these efforts, they have offices in Osaka, Taipei (Taiwan), and two in California.

Looking to a rising Vietnam

False expectations that Vietnam could become the next Silicon Valley aside, the country is already being recognisedfor its tech talent and growth potential. Its small but vibrant startup scene is attracting funding with 67 investment deals signed in 2015.

With the evolution of the local ecosystem there, it makes sense that services such as ChatWork might look to establish a greater presence there as it continues to grow. Beyond the startups, it appears that other parts of Asia are looking to Vietnam as an ideal site for outsourcing, which is how Yamamoto discovered the expansion opportunity.

“We have a strong user base in Japan and we noticed that many of these companies also have outsourced offices and teams in Vietnam,” he told Geektime in an email. “Once those Vietnam-based teams adopt ChatWork, they also then add new local contacts they work with (like vendors and consultants) to their accounts.”

“It’s been a very natural and viral process,” he said of their entrance into Vietnam, adding that, “We’re seeing viral growth in the Southeast Asian markets due to our success in Japan.”

As Vietnamese internet use and local business ecosystem continue to expand, it will be interesting to watch as other services such as CRMs, marketing tools, other productivity apps, etcetera start trying to sell to the Vietnamese, adapting their products to the local market.

Where to next

Looking ahead, Yamamoto said that they will, “likely target countries around the world where personal chat apps are already popular.” He noted that, “A user’s adoption of personal chat apps tends to segue into them adopting business chat apps as well.”

Their plan is to add more native language capabilities and features to the product to meet the needs of people in a diverse set of locations across the globe that could be open to their product.

It is worth noting that while US-based companies such as Slack and Facebook are able to gain considerable market share around the world, there are often more local or regional options that meet the tastes of users there. Think about WeChat in China or the Russian social network VK that have held on strong and even grown despite the rise of their global competitors. In the business chat space there are players such as typetalk and Jandi that are also geared to address Asian users.

While Slack probably is not going anywhere any time soon, ChatWork could start to challenge them in smaller markets where they might be able to provide a more basic and effective bang for the buck.